More and more experts believe that there could be a positive trend for cryptocurrencies during the first quarter (Q1) of 2026, due to several major economic factors.
Analysts say that Bitcoin could rise to between 300,000 USD and 600,000 USD if these factors are met.
Five macro trends driving a possible rise during Q1 2026
The combination of five key trends creates what analysts call a 'perfect storm' for digital assets.
1. The Fed pauses its balance sheet and reduces headwinds
The Federal Reserve's quantitative tightening (QT), which reduced liquidity during 2025, recently ended.
When liquidity stops decreasing, it is often positive for risky assets. Data from previous cycles show that Bitcoin can increase by up to 40% when central banks stop reducing their balance sheets.
Analyst Benjamin Cowen says the market may begin to feel the effects of the Fed ending its QT early in 2026.
2. Interest rate cuts may return
The Federal Reserve has recently lowered interest rates, and both their own statement and forecasts from Goldman Sachs indicate that rate cuts may continue into 2026, possibly down to 3–3.25%.
Lower interest rates usually increase liquidity and make it more attractive to invest in risky assets like cryptocurrencies.
3. Better liquidity in the short term
Increased trading of Treasury bills or other measures to support short-term rates can ease financing and lower short-term rates. The Fed says they plan to begin technical purchases of Treasury bills to manage market liquidity.
"[Buying is] only meant to maintain sufficient reserves over time, thus supporting effective control of our interest rate... these issues are separate and do not affect our monetary policy," said Fed Chair Jerome Powell.
The Fed sometimes intervenes in the short financing market when there are liquidity problems. Such imbalances are seen in the overnight repo market, where banks borrow cash using government securities as collateral.
Recently, several signs indicate that short-term financing is becoming more difficult, for example:
Money market funds have high levels of cash,
The issuance of T-bills is decreasing as the Treasury has changed its strategy, and
Higher demand for liquidity during seasonal peaks.
The Fed has started a controlled purchase of Treasury bills to prevent short-term rates from deviating from the Federal Funds Rate target. Treasury bills are government bonds with the shortest maturities, often from a few weeks to a year.
This is not conventional QE, but the action can still provide much more liquidity to the crypto market.
For Q1 2026, the outlook for risky assets like crypto and stocks is quite positive. The Fed's policy change towards maintaining or increasing liquidity is behind this.
4. Political incentives favor stability
Since the U.S. has midterm elections in November 2026, politicians prefer to see a stable market rather than large swings.
It reduces the risk of rapid regulatory changes and encourages investors to take more risks in risky assets.
"If the stock market in the U.S. performs poorly before the midterm elections, the current administration will be blamed – hence they are doing everything to help stocks (and crypto)," writes macro analyst Thorsten Froehlich.
5. Employment "paradox"
Weak labor market figures, such as lower employment or more layoffs, usually lead the Fed to become more cautious.
A weaker labor market increases the pressure on the Fed to loosen policy, providing more liquidity and better conditions for crypto.
Experts believe that positive market sentiment is growing
Several within the industry agree with this macro trend. Alice Liu, head of research at CoinMarketCap, believes the crypto market could recover in February and March 2026 due to many positive economic signs.
"We will see a market recovery in the first quarter of 2026. February and March will be a bull market again, based on a combination of macro indicators," reported Binance, referring to Alice Liu, Head of Research, CoinMarketCap.
Some analysts are even more optimistic. Crypto commentator Vibes predicts that Bitcoin could reach $300,000 to $600,000 during Q1 2026. This shows a strongly positive market belief as liquidity improves and macroeconomic conditions become easier.
Currently, market participation is low. Bitcoin open interest has decreased, indicating that traders are cautious.
If these macroeconomic advantages materialize, consolidation could quickly lead to a significant rise. It could create a historic start to 2026 for the crypto market.
